But many observers have doubted Enron's changes of avoiding bankruptcy without Dynegy's support.

Bankruptcy looms

Standard & Poor's, one of the agencies which downgraded Enron's debt, had ranked as a "distinct possibility" Enron's need to file for court protection from creditors should the takeover fail.

Enron itself, in a recent regulatory report, doubted its ability to "continue as a going concern" should its debt be giving junk status.

"Their biggest asset is really their people and the trading floors and when you start losing credibility... that will dry up very quickly," Brian Youngberg, energy analyst at stockbroker Edward Jones told the BBC's World Business Report.

"Based on assets this would be the largest bankruptcy in history."

"The bankruptcy filing is really imminent. The problem is there is really not much that will be left for the common stock shareholders," he added.

Changing fortunes

Enron's crisis represents a rapid turnaround for a company which has won a string of awards, last year posted profits of more than $1bn, and was only recently ranked number seven in the Fortune 500 list of US companies.

But the Houston-based firm ran into trouble six weeks ago when observers questioned mysterious charges in its balance sheets, triggering an investigation by the US financial watchdog.

Enron later admitted that profits between 1997 and 2001 were $600m lower than had been claimed.